Medco chief keeping close tabs on 40-plus biosimilars in development

The basic story on biosimilars has been done so many times that the main points of a new Reuters article on the topic will sound familiar to anyone working in drug development. But industry insiders who drill down into the story will find some interesting nuggets of information that may surprise them.

Item number one: Medco CEO David says that "over 40 different compounds are in development right now tied to many, many different manufacturers. They are working on them as we speak." It's also apparent that rheumatoid arthritis and cancer, both disease areas served by long-time biologics, will be the first to see biosimilar competition, he adds.

Interestingly, Snow is hearing from the big manufacturers that they're planning to offer biosimilars at a discount of 30 percent to 60 percent. That's far, far deeper than the 15 percent-or-so discount cited by many analysts to date. The problem with biosimilars, as Reuters makes clear, is that they will be very expensive to test and get approved by regulators at the FDA, who are making it clear that they will be looking for data that clearly demonstrates that these complex biologic knockoffs work as advertised. That will add to development costs and restrict the game to players with the money needed to compete. And that in turn will limit the discounts these biosimilars can be sold at. For small molecule drugs, of course, deep discounts on generics are the rule of the day.

One of the biosimilar hopefuls observing the game is Biogen Idec CEO George Scangos, who sees his company as too small to weigh into this battle by itself. Scangos, who has been shaking things up at Biogen, is looking for pharma partners interested in collaborating on programs, leveraging Biogen's manufacturing abilities with Big Pharma's sales force.

"I've been looking for a way for us to participate in biosimilars without diverting our attention," Scangos told the news service this week. And if he's successful, Biogen Idec could create a new business arm able to generate blockbuster revenue.

- see the Reuters story on the biosimilar trend
- here's the Reuters story on Scangos' biosimilar strategy